They’re Not Tax Havens … They’re Secrecy Havens

Citing a GAO report I linked to in January, Joe Conason had a much noted article on "tax shelters" this week. He argues we should focus on finding all the unpaid taxes in the tax shelters these companies are using, rather than focusing on AIG’s measly bonuses.

In the article, Conason asks "what other reason" businesses would have for using the tax shelters, concluding that it must be the taxes.

According to the Government Accountability Office, nearly all of America’s top 100 corporations maintain subsidiaries in countries identified as tax havens. As the GAO notes, there could be reasons other than avoiding the IRS to set up branches in places such as Singapore, Luxembourg and Switzerland, where taxes are light or nonexistent and keeping clients’ illicit secrets is considered a matter of national pride.

But what reason other than evasion could there be for Goldman Sachs Group to set up three subsidiaries in Bermuda, five in Mauritius, and 15 in the Cayman Islands? Why did Countrywide Financial need two subsidiaries in Guernsey? Why did Wachovia need 18 subsidiaries in Bermuda, three in the British Virgin Islands, and 16 in the Caymans? Why did Lehman Brothers need 31 subsidiaries in the Caymans? What do Bank of America’s 59 subsidiaries in the Caymans actually do? Why does Citigroup need 427 separate subsidiaries in tax havens, including 12 in the Channel Islands, 21 in Jersey, 91 in Luxembourg, 19 in Bermuda and 90 in the Caymans? What exactly is going on at Morgan Stanley’s 19 subs in Jersey, 29 subs in Luxembourg, 14 subs in the Marshall Islands, and its amazing 158 subs in the Caymans? And speaking of AIG, why does it have 18 subs in tax-haven countries? (Don’t expect to find out from Fox News Channel or the New York Post, because News Corp. has its own constellation of strange subsidiaries, including 33 in the Caymans alone.)

I pointed out in my January post the other point of these tax havens:

What Levin didn’t say, of course, is that these tax havens allow them to avoid financial oversight, too.

And wrote another post giving a scary example of what those other reasons might include.

Masaccio pointed me to these two passages in AIG’s 10K, which sound like they may describe what Gober is talking about:

Various AIG profit centers, including DBG, AIU, AIG Reinsurance Advisors, Inc. and AIG Risk Finance, as well as certain Foreign Life subsidiaries, use AIRCO as a reinsurer for certain of their businesses, and AIRCO also receives premiums from offshore captives of AIG clients. In accordance with permitted accounting practices in Bermuda, AIRCO discounts reserves attributable to certain classes of business assumed from other AIG subsidiaries. (10)

AIRCO acts primarily as an internal reinsurance company for AIG’s insurance operations. This facilitates insurance risk management (retention, volatility, concentrations) and capital planning locally (branch and subsidiary). It also allows AIG to pool its insurance risks and purchase reinsurance more efficiently at a consolidated level, manage global counterparty risk and relationships and manage global life catastrophe risks. [my emphasis]

So AIG admits that its got a company, AIRCO, that is reinsuring its own insurance, and AIRCO is using a Bermuda accounting trick to limit the reserves it holds for this reinsurance.

AIG is almost certainly using a Bermuda subsidary to engage in an incredibly risky practice that makes the "healthy" insurance companies we’re counting on to get repaid a house of cards, because the reinsurance on the insurance they offer probably aren’t backed by the amount of reserves they should be.

And here’s another example of AIG using a secrecy haven to engage in risk and avoid regulation.

AIG is claiming that it overpaid taxes related to activities of an AIG-linked Panamanian corporation chartered in tax haven Panama.

[snip]

At issue is AIG-linked Starr International Company, Inc. (SICO), which, it turns out, is AIG’s largest private shareholder. It is also the manager of a compensation fund for AIG employees, who are paid, you guessed it, in AIG shares. Oh, and SICO’s chairman is former AIG chairman Maurice "Hank" Greenberg.

Why is SICO, which is so extensively connected to U.S. firms and individuals, based in Panama? Well, the country applies low to no regulations and taxes on foreign firms registered there, of which there are 350,000 – second only to Hong Kong.

You see, these companies are robbing us blind by using these countries as tax havens. But that’s not the most troubling aspect of the growing use of secrecy havens. As part of a very dangerous game, companies are using them to pick and choose when they want to be a big holding company and when they want to hide an incredibly risky venture somewhere were no one will account for it in stock valuations of the holding company or find it when suing the company. That limits the ability of consumers and investors to hold the company responsible, yet it’s not clear it really mitigates risk.

And, in the case of companies like AIG and Citi, it means taxpayers bear a great deal more risk than we’re talking about. 

Now, I raise this not to take anything away from Conasan’s point–they are robbing us blind. But because the issue of tax and secrecy havens will be a key issue at the G20 meeting. And it looks like a key dispute will be how to enforce such new regulations.

The 20 largest economic nations in the world are expected to produce a new set of rules for oversight, transparency and conduct for offshore tax havens next week as part of a broader effort to overhaul the regulatory structure of the world economy, White House officials said Saturday.

The new "rules of the road" for Caribbean and other tax havens will be included in a communiqué issued by the Group of 20 nations at a much-anticipated London economic summit on Thursday, said Michael Froman, a deputy White House national-security adviser for international economic affairs.

[snip]

On the tax-haven question, Mr. Froman acknowledged that there were no major offshore havens among the nations of the G-20. But, he said, the summit leaders have conducted "a series of dialogues" that will be reflected in the road map for clamping down on tax cheats.

The U.S. remains somewhat divided from Germany and France, which are pushing to blacklist tax-haven nations that don’t go along with the emerging G-20 prescriptions.

This is likely going to be an answer where Europe tries to push us further than we’re willing to go. We’d do well to understand the scope of the issue as that debate happens. 

image_print
77 replies
  1. JimWhite says:

    They’re taunting us. Why else would they use names like “AIRCO” [e.g. this is just so much air keeping our company inflated] and “SICO” [You think Michael Moore is a Sicko? We’ll show you who’s a sicko!]

    Thanks for being on this, EW. Given Obama’s recent positioning on state secrets, I don’t hold out much hope he’ll be any better when we get down to the real details of ending corporate secrets used to escape oversight.

  2. Loo Hoo. says:

    Maybe these corporations and individuals should be given one month to pay their taxes at 39%, and if they don’t, they can pay 70% and spend a little time in the clink.

  3. acquarius74 says:

    When I was opening the DIGG, one of the articles shown as a suspected duplicate stated that there are $7.3 TRILLION stashed in offshore accounts. I’ll see if I can locate that article at http://www.breitbart.com (???)

    No wonder the US is dragging its feet about the G20 blacklisting those countries harboring off-shore tax secrecy havens.

    In our ‘Secret Government’, is Phil Gramm the Secretary of World-Wide Tax Dodgers Treasures ?

    Haven’t yet read all of your links, Marcy, so if this is repetitious, please forgive.

  4. earlofhuntingdon says:

    The old saw has been turned on its head: the difference between tax avoidance and tax planning used to be five to ten in a federal pen. Now doing one makes you partner; doing only the other means you look for another job.

    Secrecy and “legalized” tax avoidance are two sides of the same coin. Another twist on that meme is that subsidiary’s set up in certain jurisdictions, such as Bermuda, can qualify for a version of “generation skipping”. That is, for tax purposes, the subsidiary’s existence is ignored and its profits and losses are deemed to be those of its parent, another subsidiary in the chain.

    One benefit is that it avoids having too many tiers, which can lead to adverse tax consequences. It also means that the data from the subsidiary is consolidated with the parent, making it harder to “find the pea” when that parent has multiple operations (which it would by design).

    Tax havens are used to park profits from overseas operations and keep them abroad and away from the US tax man. Smart states legislate around that farce by calculating taxes based on global income, which is how individual US taxpayers are taxed (but not the legal persons known as US corporations; funny, huh?)

    As long as profits aren’t brought back to the US, they can be recirculated abroad indefinitely without being subject to US tax. That’s a dodge individual UK taxpayers, and those in Hong Kong, for example, have had the benefit of for ages. The UK is switching to taxing global income, a step in the right direction.

    George Bush and Congress gave US corporations another present a few years ago. It allowed them to bring back those offshore profits in a lump, subjecting them to a derisory 5% or so tax rate. If I recall correctly, it was the carrot on the stick just before or just after the ‘04 election. Hmmm.

    That’s the kind of demand/reward that David Brooks thinks would eviscerate foreign aid recipients and make them moribund. By implication, he thinks it would have the same effect US corporations, should this administration and Congress demand that banks change their leadership and reform their practices within newly legislated limits. In Brooksworld, I guess sauce for the goose is only sauce for the goose.

    • earlofhuntingdon says:

      Another dodge tax havens use is to tax only revenue actually earned there, rather than deposited or recorded there. It was a favorite one in Hong Kong, because so much of “its” economy was dependent on work performed in nearby China or elsewhere in East Asia outside of Hong Kong.

    • MarkH says:

      Tax havens are used to park profits from overseas operations and keep them abroad and away from the US tax man. Smart states legislate around that farce by calculating taxes based on global income, which is how individual US taxpayers are taxed (but not the legal persons known as US corporations; funny, huh?)

      Huh. Learn something new every day. It’s not so funny though.

    • MarkH says:

      George Bush and Congress gave US corporations another present a few years ago. It allowed them to bring back those offshore profits in a lump, subjecting them to a derisory 5% or so tax rate.

      I don’t remember the Liberal press jumping all over that one. I guess it’s up to the DFH bloggers to let the cat out of the bag.

      • earlofhuntingdon says:

        I think it was only the shrill Mr. Krugman who criticized that as one more giveaway to corporate America on or about election time. At the time, as now, the US was financing its wars on taxpayer credit cards; it wasn’t actually collecting taxes to pay for them. But Bush and Congress gave away billions in lost tax revenues with that scam.

  5. readerOfTeaLeaves says:

    (((((EW)))))

    Here’s the link to a CSPAN hearing held 4 March 2009, chaired by Sen Carl Levin, who opens the hearing by saying the US is losing an ‘estimated $100 b-b-billion/year via tax havens.’

    I stumbled on this a few weeks ago and felt like quite the dummy as I listened to this SENATE HOMELAND SECURITY SUBCMTE. HEARING ON OFFSHORE TAX HAVENS while doing some other tasks. I fond it verrrrrrryyyyyy interrrrresting…

    • readerOfTeaLeaves says:

      This is likely going to be an answer where Europe tries to push us further than we’re willing to go. We’d do well to understand the scope of the issue as that debate happens.

      I don’t think we have a clue about the scope of it, but now that I’m paying more attention to this topic, my seething contempt is growing exponentially. I don’t think we have a fookin’ clue about the actual values of Goldman Sachs, or Citigroup, or other bailed out entities, and this is part of why — and (putting on my tin-foil hat) is it possible that they actually have $$ stashed offshore, but that their US accounts make it appear that they need to be bailed out?

      The onus is on them to disprove such suspicions, but so far the Obama Admin doesn’t seem to be holding them accountable on this topic.

      Conason’s article sure comes at an interesting time, but raises a big question: why Conason? Why in Salon? Why hasn’t this merited far more media coverage — to say nothing of questions during all those TARP hearings (!).

      How many drug cartels are we bailing out via TARP’s payments to Goldman Sachs, which then moves the bailout $$ offshore to pay off some heroin producer? How many payments to authoritarian regimes who ‘invested’ in CDOs and CDSs are being bailed out using Citigroup or AIG as a ‘gateway’ to TARP (a la Cerberus Capital Management’s scheme)?

      How many of our ‘enemies’ are we feeding and nourishing via this madness?!

      This topic deeply underscores the importance of changing some laws pronto — ‘freezing’ money going offshore, period. (Yes, I’m sure that sounds ‘naive,’ but tough shit. You gotta hit ‘reset’ to get a handle on this mess.)

      With respect to Congress, which appears mostly useless, at least they should take Sen Byron Dorgon’s recommendation on a recent Maddow show:
      1. The Senate needs to appoint a Select Committee to look into the economic meltdown and create a narrative, then
      2. At the same time, have a ramped up division of DoJ going after white collar crime, and
      3. Go from there.

      ( Basically, IMHO you’d need Dorgan, Whitehouse, maybe Feingold (also on Intel), and Levin on that committee, I should think. Dunno about the GOP members… But Mary made a superb point some weeks back that unless it is well staffed, has the right members on the group, has a budget, and has legal authority to subpeona, etc, etc, you got nuttin’. So a bullshit butt-covering committee would only infuriate the public even worse.)

      BTW: Here’s the link that CSPAN hearing, which didn’t work in the previous comment.

    • acquarius74 says:

      Here is the link to a Bloomberg article dated 03/06/09 which pretty well lays out the story, including info about Sen. Levin’s proposed legislation.

      Here’s an excerpt:

      …Swiss banks manage 27 percent of the $7.3 trillion in offshore global assets, the biggest market share ahead of U.K.’s Channel Islands with 24 percent and Luxembourg with 14 percent, according to the Bankers Association…

      The Swiss seem to be splitting hairs over the definitions of tax avoidance and tax evasion. Oh, and the Swiss have volunteered to collect the taxes for the U.S., without, of course, revealing their clients’ identity or account particulars….how crazy is that?

      • earlofhuntingdon says:

        The distinction between avoidance, skirting the laws, and evasion, violating them outright, is essential to havens such as Switzerland. It’s not one credible regulators agree with.

      • MarkH says:

        The Swiss seem to be splitting hairs over the definitions of tax avoidance and tax evasion. Oh, and the Swiss have volunteered to collect the taxes for the U.S., without, of course, revealing their clients’ identity or account particulars….how crazy is that?

        If a corporation can use a tax haven legally, but an individual can’t, then what’s going on is pure tax evasion criminality and it is insane to let the Swiss hide those identities. Our IRS need accurate records of who the criminals are, so they can refer it to the DOJ for prosecutions.

  6. klynn says:

    I encourage anyone to do a Wiki search with the word “Switzerland” and any other word combos like offshore tax haven, tax shelters …Use your imagination on related word searches and report back on your success.

    In fact try the search with Channel Islands,Luxembourg,Caymans…You get the picture…

    I’m fairly sure writing this here: you’ll be lucky to find anything. Some wiki scrubbing has been happening.

    Google yields information however.

    • acquarius74 says:

      Thanks, klynn. After reading Marcy’s articles on this, and from what I’ve read going back to Michael C. Ruppert’s ‘Crossing The Rubicon’ about Citi and AIG and other banksters being supported by drug money, I get madder and madder as I read and see news items about the mushrooming tent cities of our ‘newly poor’ class of people ousted from their homes, and job loss numbers increasing daily. Yet only a pittance for jobs and homeowners in the stimulus bill and more trillions to these same banksters.

      This is insane!!

  7. ezdidit says:

    Also Protection Against Liability. Assets located in an off-shore coporate facility cannot be attached. These off-shore assets protect the executives and holders of preferred stock & corporate bonds. Options may also be triggered and exercised by off-shore assets. Derivatives, CDS are all foreign-owned, based in these off-shore facil’s. On the downside now, repeal of these laws will require international agreements. They have become, in effect, like sovereign nations.

    • readerOfTeaLeaves says:

      They have become, in effect, like sovereign nations.

      Or, to use EWs astute term, “Neofeudalists’.

      We’re seeing Citigroup behave as badly as the Renaissance principality of Florence; paying artists for glorification, and the Pope be damned. The Pope is expected to bow to Cossimo de Medici.

      Here’s hoping Obama has a hearty laugh while watching our modern Cossimo’s do community service and jail time, after returning their extravagance to the public purse.

      But we shall see.

      (Oh, and FWIW, the loathsome Michael Ledeen no doubt flatters his vanity by supposing himself Dick Cheney’s own private Machiavelli-advisor. As if Dick Cheney needed anything other that fawning obeisance, but whatever…)

    • acquarius74 says:

      It’s reported that of the last $50 Billion that AIG got in bail-out money, $12.5 billion went to Goldman Sachs, the remaining $37.5 billion went to European banks. (CNBC reporter, Rytger ?)

      Also Protection Against Liability. Assets located in an off-shore coporate facility cannot be attached

      Which session of Congress passed such an assinine legislation?

      The assets and income of Average Joe Citizens are attached by IRS every day. No protections for them, huh?

      • ezdidit says:

        Gramm Leach Bliley: rescinded Glass Steagall and then set out to leave enormous loopholes in international banking, pricipally adding words to “bank” wherevere it appeared with the words “or company,” thereby conferring international bank status on a company based in the U.S. provided there was “an entity” based offshore to conduct this work. (Bank Holding Company Act of 1956)

        • acquarius74 says:

          Thank you, ezdidit. I should have known! That’s 18 1/2 years of tax evasion fraud these fat cats have rat-holed away.

          When are we going to see more than just talk about new regulations? Have any new bills actually passed in the House and Senate?

          • MarkH says:

            That’s 18 1/2 years of tax evasion fraud these fat cats have rat-holed away.

            When are we going to see more than just talk about new regulations? Have any new bills actually passed in the House and Senate?

            I’m sure it won’t be an easy bill with so many things up in the air. But, I’d like to see a big public debate on it over the next 2 or 3 weeks. All these endless Congressional hearings with Geithner & Benanke are getting boring.

            • cinnamonape says:

              Let’s split the difference and only make them pay taxes on the stuff the stole over the past decade…and demand that they make major contributions to every food closet, homeless and battered women’s shelter in the country.

              • MarkH says:

                Let’s split the difference and only make them pay taxes on the stuff the stole over the past decade…and demand

                After all the IRS horror stories told by middle class Americans I have little sympathy. I’d rather charge them the full tax plus penalties on anything we can recover. They’ve been part of the ideology that has pushed American down into the ditch and it’s time to set that right (to the extent it can be done).

  8. Synoia says:

    “On the tax-haven question, Mr. Froman acknowledged that there were no major offshore havens among the nations of the G-20.”

    Bullshit. Where do you, Mr Froman, believe Jersey, Guernsey & The Isle of Man are? The Caribbean? They are in the UK. In the EU.

    • earlofhuntingdon says:

      Correct. Luxembourg has a checkered history on this, too. The French and Italians consider tax avoidance a national past time. All are in the EU. This is by no means “the other guy’s” problem.

      Banking is digital and global. Its resources are accessible with a PDA, a phone, or the point and click of a laptop. That makes the argument over geography non-sensical.

      The predators, opportunists and manipulators in every society have ready access to the tools needed to defraud and avoid taxes, which is why a global solution is necessary to reduce the damage they cause.

      • readerOfTeaLeaves says:

        Banking is digital and global. Its resources are accessible with a PDA, a phone, or the point and click of a laptop. That makes the argument over geography non-sensical.

        The predators, opportunists and manipulators in every society have ready access to the tools needed to defraud and avoid taxes, which is why a global solution is necessary to reduce the damage they cause.

        Oxdown diary on this topic, please.

    • skdadl says:

      Please forgive the minor pedantry, but the Isle of Man and Jersey and Guernsey are not actually part of the UK or the EU. Maybe you have to be one of us to understand the twists and turns, but they are self-governing Crown dependencies, which means they aren’t colonies but they are attached to the Crown — don’t ask. They aren’t sovereign either, like the members of the Commonwealth (eg, Canada, Australia, etc), even though Commonwealth nations are also sort of attached to the Crown, to varying degrees, depending.

      The Isle of Man is also one of the Celtic nations — we used to say six nations, but I think the count has gone up.

      • readerOfTeaLeaves says:

        Yes, didn’t those islands, like Brit protectorates in the Caribbean, originate as Crown protectorates under the old pirateers in the late 1700s and early 1800s? Sort of a mix of rogue thieves, extractive plantation owners, and buckaneer you’ll-never-catch-up-with-me insolence…?

        • skdadl says:

          I honestly don’t know the history very well, except that the parliament on Man is very old, much older than control by the dreaded Sassenachs (the English).

          I also don’t know but wonder whether it was someone’s bright idea to keep them separate from the UK and out of the EU, while still attached to teh queen.

          It is a real shame that we can’t debrief that woman, y’know. She has seen so much, knows so much, but she is never gonna spill.

      • earlofhuntingdon says:

        Nicely parsed, but they are de facto territory of the UK for practical purposes, and pet tax havens for City law firms and investment bankers.

        • earlofhuntingdon says:

          But yes, they are legally independent bodies, while being wholly dependent on the UK (or France) for their economies, trade and physical protection. Their status is technically closer to that of Monaco or Lichtenstein and wherever it is the Mouse That Roared.

        • skdadl says:

          Well, yes, that’s what I should have explained further when I said that I wondered whether that was someone’s bright idea — to maintain that status for, ah, practical reasons.

          • earlofhuntingdon says:

            I think you’re right on the technical status of Jersey, Guernsey, the Isle of Man, etc., and that their “independent” status continues, in part, because of their utility as tax havens for the larger states that protect them (the UK and France).

            As for your bonnie discussion of Scottish lairds and the heathen English, I’d be hard pressed to recite the difference between the Jacobites and the Jacobins, but I agree that the glens are wild and beautiful, as is the elixir from Speyside.

      • MarkH says:

        the Isle of Man and Jersey and Guernsey are not actually part of the UK or the EU. Maybe you have to be one of us to understand the twists and turns, but they are self-governing Crown dependencies, which means they aren’t colonies but they are attached to the Crown — don’t ask. They aren’t sovereign either, like the members of the Commonwealth (eg, Canada, Australia, etc), even though Commonwealth nations are also sort of attached to the Crown, to varying degrees, depending.

        I have the strange feeling this is where Dick “Barnacle” Cheney will end up. He ought to fit right in with all the other attached, but dependent, but not sovereign, but controlled & run by the Queen.

        Yeah right.

    • MarkH says:

      “On the tax-haven question, Mr. Froman acknowledged that there were no major offshore havens among the nations of the G-20.”

      Bullshit. Where do you, Mr Froman, believe Jersey, Guernsey & The Isle of Man are? The Caribbean? They are in the UK. In the EU.

      Ooooh, way to go. That almost hit the floor untouched, but you caught it and flung it right back in his face. Perfect!

    • cinnamonape says:

      Hong Kong and Macau are both Chinese territories

      And I believe that Bermuda, British Virgin Islands, Cayman Islands, Isle of Man, Channel Islands (Jersey and Guernsey), Cook Islands, Montserrat and the Turks and Caicos Islands are all British Overseas Territories.

      • Rayne says:

        But there’s another angle which should also be taken into consideration.

        Some countries have deliberately sought insurance industry business by establishing “insurer-friendly” business code.

        Bermuda is a well-known example.

        But Ireland is another.

        Can you point out any others?

  9. bobschacht says:

    This story shows, of course, why AIGFP had to retain all those employees. They knew how to perpetuate the fraud and wind it down in a way most profitable for AIG without spilling the beans to federal investigators.

    Bob in HI

  10. earlofhuntingdon says:

    Tax havens are not limited to Europe or to financial operations. The Persian Gulf has several tax havens, especially for those doing business in the Middle East, like Halliburton.

    Several American companies have theoretically reincorporated themselves in Bermuda, while exercising de facto management control through their US operations. Halliburton is no exception in having 58 subsidiaries in foreign tax havens.

    This is not news to Congress. What would be news is if Congress started doing something about it.

  11. klynn says:

    On a lighter note…

    The oldest son of klynn just heard the new CITI ad.

    Ad states, “We have multiple ways of protecting your money…”

    Son of klynn finishes the ad with, “Because we just take and keep your money.”

    Gotta love those smart Sophomores in high school.

    (Mom of son of klynn mumbled, “Yeah, in offshore accounts.”)

    • acquarius74 says:

      Be proud, Mom klynn. Your story gives me hope for the upcoming generation. My oldest grandchildren are in first year college. I wish I could see a better America for them to live in.

  12. MadDog says:

    OT – G.M. Chief Is Said to Be Resigning in Deal With U.S

    The chairman and chief executive of General Motors, Rick Wagoner, is resigning, just hours before President Obama was expected to unveil his rescue plans for G.M. and the ailing American auto industry, a person close to the decision said Sunday.

    Mr. Wagoner was asked, and agreed to, step down as part of G.M.’s restructuring agreement with the Obama administration, according to an administration official who spoke on condition of anonymity because a formal announcement has not been made yet…

    • earlofhuntingdon says:

      The head, but not the heart. This is symbolic until otherwise proven. And let’s see Mr. Wagoner’s total pay and severance. That would include deferred comp, supplementary retirement packages (and whether these are converted to cash in anticipation of a bankruptcy or other disadvantageous event – note that managers retirements for the bankrupt Delphi were capped at a low level), and post-employment consultancy arrangements.

  13. pseudonymousinnc says:

    OT but breaking and in EW’s sphere of interest: Rick Wagoner’s out, at Obama’s request. (Senior execs at AIG will, presumably, not be clearing their desks.)

    The Channel Islands were part of the Duchy of Normandy, so their feudal attachment goes back to William the BastardConqueror; the head of state is HMQ in her capacity as Duke (yes, Duke) of Normandy, and the Loyal Toast at formal occasions is to “The Queen, our Duke”. IoM has a very different history, being a feudal chew-toy between various aristos: it was bought by the Crown in 1765, presumably because the Atholls were asset-rich, cash-poor lords whose immediate ancestors backed the wrong side in the Jacobite Rebellion.

    • skdadl says:

      … presumably because the Atholls were asset-rich, cash-poor lords whose immediate ancestors backed the wrong side in the Jacobite Rebellion.

      *cough* Some of us still don’t think that that was the wrong side. */cough*

      Srsly, I didn’t know the Atholls had roamed that far to the west. I know them better as the benefactors (still) of the great central glen that runs from just north of Perth to Drumochter Pass, one of my most favourite places on earth.

      • pseudonymousinnc says:

        *cough* Some of us still don’t think that that was the wrong side. */cough*

        By ‘wrong’, of course, I mean ‘somewhat politically uncomfortable after 1746′.

  14. perris says:

    boy, I hope looseheadprop gets a chance to see this, it’s of course information we all knew but to have it vindicated again is nice;

    a note on “unintended consequences, as this article demonstrates

    when you torture to get “information” you get less information, you don’t prevent events you cause them, you don’t frighten the oposition you invigortate them and justify their cause

    on the other hand, the cheney/rumsfeld purpose for their policies of torture were not to gain information, they knew there were better, more accurate and actionable methods, their purpose was perpetuating unrest for uneding war

    In the end, though, not a single significant plot was foiled as a result of Abu Zubaida’s tortured confessions, according to former senior government officials who closely followed the interrogations. Nearly all of the leads attained through the harsh measures quickly evaporated, while most of the useful information from Abu Zubaida — chiefly names of al-Qaeda members and associates — was obtained before waterboarding was introduced, they said.
    Moreover, within weeks of his capture, U.S. officials had gained evidence that made clear they had misjudged Abu Zubaida. . . . None of [their earlier claims] was accurate, the new evidence showed.

  15. earlofhuntingdon says:

    The disparate treatment of Wagoner and Wall Street’s “giants” is as staggering as the difference in money paid to rescue one vs. the other.

  16. texasaggie says:

    i question the statement about how we should forget about the bonuses and concentrate on the tax shelters. Why can’t we do both?

  17. albertchampion says:

    please. i want to hold assets outside of the usa. in another currency. because the usa is a gangster government. and that gangster government is going to continue to so mismanage the us economy that the usd is going to become so devalued as to experience a devaluation of a staggering amount.

    the usd is going to be zimbabwed. and there is going to be bank holiday. where all usd assets held in us accounts are going to be seized in the sense that a new currency is going to be declared at a transfer rate that will impoverish all holding greenbacks.

    i think that if you are being responsible for your assets, you must move them out of the usa. and into sounder currencies.

    of course, it is my guess that the posters on this board have no real assets.

    and think that the usg is a benign entity. that the irs is their friend.

    personally, i am sick and tired of financing amerikan warmongering. and, as we have been learning, barry obombya is just as committed to mass murder, preserving the imperial war state, as his predecessor[s].

    do you really support the idea of continuing to finance that murder, inc?

    is this a progressive, anti-fascist board?

    i would recommend that all us citizens opposed to the evil empire get their funds out of the usa. the sooner the better. otherwise, you can consider yourselves supporters of the evil empire, propellants of its proposed continuing murder inc operations in pakistan, afghanistan, iran, colombia, ad infinitum.

    this is the same left, i guess, that supported lbj.

    • cinnamonape says:

      I think that can be done legally. All you have to do is transfer them above board, and pay whatever taxes you are supposed to pay on US earning. Is that an issue? Then you can convert anything you take abroad into the local currency or even gold. That is, if that nation has no restrictions on it. The issue is not money transfers, or foreign investment, or conversion. It’s not paying taxes on your US earnings.

  18. goldstandard says:

    Finally someone is asking the right questions. As previously stated, the bonus fiasco is only a diversion and Joe Conason is on the right trail. To back his intuition up look no further than here. http://www.worldreports.org.

    This is a snippet of the story that is breaking in London this evening….

    UK NEWSPAPER BARRED BY COURTS FROM PUBLISHING INCRIMINATING BARCLAYS DATA
    On 20th March 2009, The Guardian plastered its front page with a report in which it revealed some outline details about the scandal involving Barclays Bank’s secret routine use of tax havens, when of course the ordinary taxpayer is precluded from doing so without disclosing such usage to the UK tax authorities. In its lead report, The Guardian stated that Barclays’ schemes:

    ‘… are similar to those detailed in documents published by The Guardian this week which have been the centre of a three-day hearing at the High Court, and are the subject of a gagging order’.

    The British newspaper’s report continued:

    ‘The internal Barclays memos were leaked by a mole to the Liberal Democrats. The new allegations reiterate claims that the bank’s main purpose in entering into these schemes was to make profits from tax avoidance through an intricate circuit of offshore Cayman Islands and Luxembourg-based companies. The profits are said to be enormous and the deals so complex that HM Revenue and Customs (HMRC) struggles to unravel them’.

    • acquarius74 says:

      Thank you, goldstandard, and Reyne at 61. Let’s stay on this like a pit bull! I’ve got grandchildren that must pay the gambling debts of these criminal bastids.

      • goldstandard says:

        I sincerely hope that both Marcy as well as Joe Conason will follow up and continue digging. AIGFP was used as a conduit for such tax havens. Now it is becoming clearer as to why our tax dollars would fly out of the back door of AIG as fast as they entered. I have a feeling that both Madoff as well as Stanford had been using off shore tax havens to launder funds. The question is for whom?

        • acquarius74 says:

          Shortly after Madoff turned himself in I began to suspect he was taking the fall for others. His earliest ‘clients’ who got in, got their pay-offs and got out?? We only know the names of those who got scammed, right?

          Stanford may lead to the Brits – polo, cricket, and the big lie about descending from Sir Somebody Stanford for whom Stanford U is named, eh old chap?

          If it’s Black Ops and M15 we can forget about ever learning the answers.

    • acquarius74 says:

      Thanks so much for that link, goldstandard. Just finished reading the whole thing. Some of the best is near the end, so, folks, don’t give up.

      Included in the subject matter is the list of names/countries who will be attending the April 2 meeting in London of the G20 (”with their hang-ups”). Yup, gonna solve the world’s money crisis and prevent The Greatest Depression in 4 1/2 hours – – when they’re all mad at each other!

      The thought kept recurring to me that the G20 meeting should have been scheduled one day earlier – Fools’ Day.

    • MarkH says:

      As previously stated, the bonus fiasco is only a diversion

      Saying “diversion” implies someone is trying to divert attention. I don’t think it is/was that at all. I think it has been the public who became fascinated with and angered about the bonuses and government just responded. Of course, how political actors responded and perhaps used that public anger is another thing altogether.

  19. Rayne says:

    So if you’ve had a chance to look at AIG’s 2007 Annual Statutory Statement (2008 is not available online yet), you can see that AIRCO and Starr International Company, Inc. do not appear in the list of companies licensed and overseen by any of the National Association of Insurance Commissioners (NAIC). There is another subsidiary Starr-named, but not SICO (suggesting that at some point there was a relationship between the company formerly known as “Starr Excess Liability Insurance Company, Ltd.”, incorporated in Delaware, and SICO).

    Which suggests to me that AIGFP may have taken ALL of AIG’s U.S. insurance firms’ reserves and used them as leverage in swaps under AIRCO in offshore reinsurance transactions. The NAIC members naively believe that there is no possibility the underlying reserves and insurance contracts are exposed because they are completely unaware of any possibility that AIGFP would do something so incredibly risky and stupid. And AIGFP would have felt very comfortable using the underlying insurance business as leverage because it was thoroughly audited all over the place and equally scrutinized by actuaries…but the risk wasn’t in the insurance business, but the use of the business as leverage for swaps.

    I’m also wondering whether the fact that SICO was based in Panama caused any faint tinkling of bells in the subconscious; I couldn’t help but think of John Perkins. Was there more going on in the insurance industry at one point in time where the Japanese might have honed in on more than the canal?

  20. goldstandard says:

    Forgot….The British high court may have prevented the Guardian from printing the data but Barclays data can be found at Wikileaks.

  21. albertchampion says:

    of course, it always more astonishing that you think.

    check out page C1 of friday’s[27/3/09] wsj. read the feature sty….

    THE U.S’s FLY ON THE WALL AT AIG.

    james cole, esq. as an agent of the usg, has been monitoring aig board meetings and corporate activities since 2005.

    mr cole is very close to eric holder.

    do you think that barry obombya is much different from george walker bushit?

    owned by the same coterie of financiers, i think. what say you?

  22. albertchampion says:

    oddly, the issue is becoming that many countries do not want to establish accounts for americans, even if they are declared accounts.

    i think that you will not be able to open, as an american citizen, any account in chur now.

    the chur banks do not want to deal with the irs.

    and my issue remains, why do you think that any government, especially a gangster us government, has any jurisdiction over your assets?

    please tell me/us why it is that you think any government is entitled to a claim on a citizens assets/earnings?

    this is a philosophical issue that most care to ignore. so i am all ears as to why the state should have the right to confiscate a citizen’s property.

    this issue harkens back to fdr’s confiscation of privately-held gold. gold that would have been safer if held outside of the usa. in swiss banks, for instance.

    and now the issue reverts to a class warfare issue. for the sake of argument, let us say that decades ago, i noticed that the government of the usa was destroying my assets[denominated in greenbacks], so i converted my assets into gold/silver.

    prudent sheltering of assets i think that could be called.

    some time in the near future, barry obombya decides to play fdr, and confiscate all citizen’s precious metal holdings. impoverishing all who had foresight to acquire, but not enough foresight to get those assets out of the usa.

    who do you think owns you? the state?

    i think i know your answer, and must ask, why have you decided to be a statist?

  23. MsAnnaNOLA says:

    Sounds like we need an Alternative Minimum Tax for companies using offshore subsidiaries in tax havens. Maybe 100% will do it.

  24. DeadLast says:

    A major reason for these off-shore operations is an industry called transfer pricing. the “valuable” portion of profitability happens in those countries that have very low tax rates, compared to the U.S. thus, the goods come into the US at a higher basis resulting in lower import duties and taxes.

Comments are closed.